As the General Assembly wraps up its work for 2017, the fate of three bills that stand to change the fiscal and business landscape are still unknown.
One bill could provide builders some protection from lawsuits, creating more affordable housing across Colorado.
Another could ease concerns of rural and urban hospitals alike by restructuring the way the Hospital Provider Fee is counted in state revenue.
The third could pave the way for widening Interstate 25 between Monument and Castle Rock, but could come with a price tag too high for businesses in Colorado Springs.
And all the uncertainty could lead to a special session to work out discrepancies between the budget versions passed in the Democrat-controlled House of Representatives and the Republican-controlled Senate. The next 19 days could be interesting.
The construction defects bill that passed the Senate is the first ray of hope for the construction industry and retailers who have longed for an end to costly lawsuits. Current law makes it far too easy for condo owners to file a lawsuit, and once a suit is filed, the entire development is stuck until it is settled: Condos can’t change hands and builders can’t build more. The threat of legal action has kept builders from tackling more developments.
It means fewer people buy, and as the percentage of renters goes up, fewer lenders will provide mortgages to people who might want to purchase their homes. Essentially, it removes an affordable entry point for homeownership, making it difficult for Millennials and retiring Baby Boomers alike.
At one time, condos made up 20 percent of construction in Colorado. Thanks to Senate Bill 156, which requires arbitration before suits are filed, that could happen in Colorado once again. And it’s important for Colorado Springs, as it strives to attract Millennials to fill its high-tech workforce needs. Senate Bill 156 doesn’t prohibit lawsuits, it just adds an additional step to seek solutions before suits are filed.
We should not allow attorneys and legal advocates to stop the creation of more affordable housing.
The Hospital Provider Fee currently is paid by hospitals in order to trigger matching federal dollars, most of which goes to treat people on Medicaid or without insurance. With $264 million projected to be cut from the state budget this year — effectively removing $528 million from budgets when federal money is included — some rural hospitals will have to close and even giants like UCHealth Memorial and Penrose-St. Francis Health Services will have to raise rates or further tighten belts.
Thanks to Taxpayer’s Bill of Rights limitations, the provider fee being included in the General Fund means that the state has to cut funding to balance the budget. Even in boom years, the state cannot plan for growth or development because of TABOR refund requirements.
The cuts are needed to balance the budget, supporters say. But there is a solution on the table. And let’s hope this time around reason prevails in Denver and the legislature agrees to move the Hospital Provider Fee to an enterprise fund. We don’t need to balance the budget on the backs of the state’s rural hospitals and our neediest residents.
The final bill under consideration is one that would increase the state sales tax to raise much-needed transportation funds. House Bill 1242 would raise $677 million during the next 20 years for transportation projects.
About 39 percent of the money would go to cities and counties to address transportation problems, while the state would keep 61 percent. An additional $3.7 billion in bonds — which the state would ask voters to approve along with the sales tax increase — would go toward high-dollar transportation projects.
It sounds great, doesn’t it? Everyone knows the state needs more money for transportation and a combination of the Taxpayer’s Bill of Rights, Gallagher and Amendment 23 make it impossible to find that money in the state budget. And the state could use the money to widen Interstate 25 between Monument and Castle Rock.
In the Springs, any new state tax would an addition to the city’s new tax increase passed to finally address its crumbling road surfaces. Passed with an overwhelming majority, the tax is paying, in part, to fill potholes around the city.
An additional .62-cent sales tax will drive up the cost of goods dramatically inside Colorado Springs. It could force retail businesses to locate elsewhere or seek products and services outside city limits. Raising sales tax revenue should not be the only solution to the state’s infrastructure needs.
As the legislature debates these bills, the Joint Budget Committee can’t solve discrepancies in the budget and provide funding for state schools and other needs. It could lead to a special session to pass the final budget this summer.
The next few weeks will be decisive. Decisions made at the state level could affect real estate, health care and transportation here in the Pikes Peak region.
Let’s wish for sound reasoning and judgment during the General Assembly’s remaining time. n CSBJ